DEFENCE SIGNALS DIRECTORATE
WHAT DSD DOES
234. DSD's primary function is to collect foreign signals intelligence (SIGINT) and then produce and disseminate reports based on such collection. These reports, which are concerned with significant political, military and economic developments in our region, are provided to key policy makers, the intelligence assessment agencies, and other selected government agencies.
235. DSD has no power to, and does not monitor the domestic communications of Australians. DSD is only empowered to monitor the foreign communications of Australians in strictly limited circumstances, such as when there is a direct threat to the safety of an individual, or a person is involved in serious criminal activity.
236. DSD also acts as the government's authority on all matters pertaining to communications security and information technology security.
237. DSD's role and functions are set down in a government directive that was issued in November 1986.
238. As mentioned elsewhere in this report, just before the conclusion of the 2000-2001 reporting period the government introduced the Intelligence Services Bill 2001 into the Parliament. One of the objectives of the bill is to clearly define and limit DSD's functions.
239. Clause 7 of the bill is as follows.
The functions of DSD are:
(a) to obtain intelligence about the capabilities, intentions or activities of people or organisations outside of Australia in the form of electromagnetic energy, whether guided or unguided or both, or in the form of electrical, magnetic or acoustic energy, for the purpose of meeting the requirements of the Defence Force, for such intelligence; and
(b) to communicate, in accordance with the Government's requirements, such intelligence; and
(c) to provide material, advice and other assistance to Commonwealth and State authorities on matters relating to the security and integrity of information that is processed, stored or communicated by electronic or similar means; and
(d) to provide assistance to Commonwealth and State authorities in relation to cryptography and communications technologies.
240. Further information about DSD can be found at http://www.dsd.gov.au.
INSPECTION ACTIVITIES
241. Inspection activities involving DSD during the reporting period have included: · monitoring compliance by DSD with the Rules on Foreign Signals Intelligence and Australian Persons; · examining requests by other agencies for information held by DSD; · reviewing all submissions made by DSD to the Minister for Defence; · inspecting DSD collection activities at its various Australian facilities; and · examining DSD's handling of applications for access to its records under the Archives Act.
242. The Director and I have agreed that following each inspection activity, members of my staff or I would discuss any concerns with an appropriate senior manager or liaison officer and any matters needing to be put in writing would be addressed to the Director.
243. I have also made a practice of following up each inspection with a letter reporting the results and outlining any issues raised during the inspection.
244. We have also agreed procedures that would operate should I form the view that any matter arising from an inspection needed to be brought to the attention of the Minister for Defence or the Prime Minister. No such matters arose during the reporting year.
Protection of Australians' privacy
245. The Rules on Foreign Signals Intelligence and Australian Persons are endorsed by the government. The Intelligence Services Bill, if enacted, will give the rules legislative recognition.
246. The rules regulate the circumstances in which DSD may collect and report on the foreign communications of Australians, with the starting point that such collection and reporting can only take place in exceptional circumstances, clearly related to the national interest.
247. In discharging its function as a collector of foreign intelligence DSD produces a significant number of reports on a daily basis, which it then distributes to its clients. The vast majority of these reports do not name or otherwise refer to Australian persons but invariably, over the course of a year, some reports do.
248. Where DSD reports mention Australians, they generally do so in a way that does not permit third parties to identify them.
249. Sometimes such reports prompt DSD's clients to ask for information about the identity of the Australian person referred to in the report. DSD will only consider these requests where they are for particular purposes directly related to the legitimate operational needs of the requesting agency.
250. DSD is required to keep records of all instances where other agencies request access to the names of these persons, whether or not DSD agrees to the request.
251. The rules also require DSD to keep records of any material retained from the inadvertent collection of communications involving Australians, and of all instances where an Australian has been deemed to be an agent of a foreign power.
252. My staff and I visit DSD headquarters approximately every six to eight weeks to inspect these records and to otherwise examine DSD's compliance with the rules.
253. In inspecting the various registers that DSD keeps, we noted that although DSD can target the foreign communications of Australians in prescribed circumstances, this is only done so in a very small number of cases. I was satisfied that ample justification existed in those cases where this power was used.
254. As in previous years, we saw no evidence that DSD was abusing its powers under the rules. To the contrary, we noted that DSD management and staff adopt a very cautious approach with regard to its collection and reporting activities.
255. We noted only a small number of cases where the rules were breached. In each instance the breach was either inadvertent or beyond the control of DSD, and immediate and appropriate corrective action was taken.
256. There was also no evidence to suggest that breaches were being hidden from scrutiny. If anything, the reverse was true.
257. In addition to conducting on-site inspection visits, my office has on-line access to most of DSD's reporting which our staff monitor for compliance with the rules on a daily basis.
258. Our inspection visits and monitoring activities brought to light several issues which resulted in correspondence with DSD. Some of the issues were procedural in nature, while others were more substantive.
259. In several instances we questioned the identification of Australian persons in DSD reporting. We received prompt advice from DSD justifying the identification and subsequently reviewed supporting documentation. I was satisfied in each case that proper consideration had been given to the issue and the necessary approvals had been obtained.
260. In another case we expressed concern that DSD continued to monitor particular foreign communications when it should have been apparent that they did not emanate from the target identity.
261. I wrote to the Director DSD stating that this action appeared to be in breach of the rules and suggested a course of action to ensure that a similar breach did not arise in the future.
262. The Director DSD subsequently advised me that he has put new procedures in place which accord with my recommended approach.
263. In summary, it is clear that DSD staff involved in collection and reporting activities take a very rigorous and responsible attitude towards compliance with the rules.
264. My confidence in this is reinforced by the attitude of the Director DSD, who has advised that his staff: "have found the process of reviewing our compliance to be of great value in clarifying the way in which the Rules should be applied."
Assistance to law enforcement agencies
265. Under the rules DSD may, in certain circumstances and subject to tight restrictions, target the foreign communications of Australians at the request of Commonwealth law enforcement agencies.
266. DSD does not receive many such requests, and if in any doubt about whether to accede to a request will normally consult my office.
267. In a couple of such instances (in which the requests were ultimately declined) I was concerned that the agency in question may not, before making the request, have exhausted other legal possibilities open to it, requiring more detailed justification than provided to DSD, to obtain the necessary intelligence. In other words, the agencies might see use of DSD capabilities as a soft option.
268. These cases prompted me to write to the Director DSD suggesting that, in principle, the test for triggering use of DSD capabilities in these circumstances should be no lower than that required to obtain a warrant to intercept domestic telecommunications under the applicable legislation.
269. The Director replied informing me that he strongly supported this view. He wrote to the heads of the relevant agencies requesting that they apply this principle when considering requests for DSD assistance. He also proposed to incorporate this concept in the next revision of the rules.
MINISTERIAL SUBMISSIONS
270. The Director, DSD maintains a register of all written submissions from DSD to the Minister for Defence. I review this register on a periodic basis.
271. These inspections show that the submissions contain sufficient information and well-considered advice.
ARCHIVES
272. My office receives regular reports from DSD about the activities of its archives unit. These reports provide a statistical summary of access requests that are referred to it and the timeliness with which these requests are dealt.
273. These reports also discuss archival issues of current or ongoing interest to DSD, such as its sentencing programme, manuscript clearance procedures, requests for information etc.
274. In addition to these reports, our inquiries sometimes require access to DSD's archives. The Balibo inquiry (see paragraph 281) imposed extensive demands on staff in DSD's archives unit. I wish to record my appreciation for their efforts.
275. I am satisfied on the basis of these interactions that DSD is providing appropriate attention to this function.
NEW COLLECTION ACTIVITIES
276. DSD frequently develops new projects involving different approaches to collection of intelligence. DSD regularly informs me of the nature of such projects and we discuss any issues that might arise concerning legality or propriety. My main concern in such cases is to ensure that adequate attention is given to such issues, including DSD obtaining legal advice where necessary.
277. In addition to receiving briefings at DSD Headquarters, we also inspected some of DSD's other facilities.
278. I am confident, based on these inspections, other inspection activities and discussions with DSD staff at all levels, that its collection activities do not involve spying on the communications of the Australian community.
COMPLAINTS AND INQUIRIES
279. The level of complaints about DSD is generally low due to the fact that DSD collects foreign signals intelligence by technical means. It is therefore unlikely that members of the Australian public would have any direct dealings with DSD.
280. During the reporting period we received 5 complaints about DSD, 4 of which were completed without the need for a preliminary or full inquiry. The other was handled as a preliminary inquiry.
281. The inquiry referred by the Minister for Defence in the 1999-2000 reporting period, into intelligence handling at the time of the killings of 5 newsmen at Balibo in October 1975, continued throughout this reporting year. I provided a report to the minister shortly after the end of the reporting year and propose to describe the inquiry in next year's annual report.
282. The complaint dealt with as a preliminary inquiry is described below.
Suitability assessment
283. An unsuccessful external applicant for a position within DSD complained about the conduct by a psychologist of his organisational suitability assessment. Although the applicant had relevant experience, received positive referee reports and had a good initial job interview, he had been told that the assessment caused his non-selection. Apart from disappointment at not getting this job he was concerned that this outcome would affect his future career prospects with DSD and the wider intelligence community.
284. I obtained written comments from the Director and examined the documents relating to the assessment, including a detailed questionnaire the applicant had completed. I also held discussions with staff responsible for the recruitment process. It was apparent from the documentation and these discussions that the results of the testing were clear-cut, that the assessment was conducted professionally and the results were sustainable.
285. Even so, the delegate of the selection committee had asked for a review of the results given the applicant's work history and the positive selection report. Senior DSD staff reviewed the results and decided an offer of employment should not be made to the complainant.
286. In view of all these factors it was not possible to uphold the complaint. One minor compensation for the complainant was an offer by DSD, which he accepted, to provide him with feedback on the areas of concern highlighted by the assessment.